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Sam Calvert

NEW MEANS TEST NUMBERS

Back in 2005 Congress inserted a “means test” into the bankruptcy code.  
What this means is that when you file bankruptcy, we must add up your income from all sources (except Social Security payments and, arguably, unemployment compensation benefits) for the six months before the month in which your case is filed.  

We then multiply that number by two [really, that’s how the formula works!] and compare that result to a chart which shows the “median income” for a household of your size in Minnesota.

The significance of this is that if your household income is over the applicable number, and if you file a chapter 13 case, you need to be in a five year plan; if your household income is under the applicable number, you can file a plan of as short as three years.  Additionally, if your income is over the means tests number, you must complete an additional “budget” based on IRS exemption numbers.

The Census Bureau periodically updates the number, and the new numbers have just been announced.

For cases filed April 1 2017, and for about six months thereafter, the numbers in Minnesota are as follows:

household of one person:  $52,785.00
household of two people  $70,889.00
household of three people:  $85,033.00
household of four people:  $101782.00

If there are more than four people in the household, add $8,400.00 per additional person.

For comparison, if your case was filed in April 2015 the numbers were:

household of one person:  $50,934.00
household of two people  $66,566.00
household of three people:  $81,044.00
household of four people:  $94,807.00

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